As we start the New Year and new school term, it is time to look forward to the legislative and compliance changes that will affect your school payroll and pension from April 2022.
Changes to statutory payment rates, pay increases and pension contributions all have an impact on school budgets.
So what are the main changes you should be aware of and factor into your financial planning?
LGPS Employer Pension Contributions
Pension Schemes tend to change their employer pension contributions from April each year. This can have a significant effect on schools budgets.
All maternity schedules will need to be amended to the newly increased SMP rates.
The first six weeks of Statutory Maternity Pay (SMP) and Statutory Adoption Pay (SAP) remain the same at 90% of the employee’s average weekly earnings (AWE).
The statutory weekly rate for all weeks after this will be the lower of 90% of AWE or £156.66. This is an increase from £151.97.
This new rate applies from 3 April 2022.
Although the majority of SMP is recoverable, this will increase the small percentage that the schools have to pay.
Historically Support Staff pay increases are implemented in April, although in recent years, we have seen them going through much later in the year and being backdated to April.
In fact, an agreement has still not been finalised on the pay increases for April 2021. The three main unions GMB, Unite and Unison, held consultation exercises with their members, which resulted in the majority who took part voting to reject the offer of 1.75%. So the next stage looks like it could be industrial action.
Whatever the outcome, the final agreed pay increase will need to be backdated to April 2021, and then another increase factored in from April 2022. This could have a significant impact on the school's budget.
All Local Authority schools must apply the percentage increases, and the majority of academies also choose to honour this global increase.
Update 8 March 2022: Two of the main Unions, GMB and Unison, have now agreed proposed pay awards for support staff members effective from April 2021. The agreed uplift is 1.75%, with the exception of NJC01, which is subject to a 2.75% increase.
At Dataplan, we understand that many schools will prefer to apply the increase in March with back pay calculated and applied to April so this is something that we are working with our clients to provide should they wish.
Support staff Increments
In addition to the global percentage increase, the Support Staff Increments see most support staff receive an increase in scale point, further increasing the payroll costs.
Social Care Levy
The Health & Social Care Levy was announced in September 2021 and comes into effect from 6 April 2022. This levy aims to aid the country's Health and Social care systems which have suffered a significant impact due to the Coronavirus pandemic.
This will affect both employees' and employers' contributions, so it will need to be factored into the school budget.
The NI rate for employers will increase by 1.25% to 15.05%. For employees, it will see their NIC rate increase to 13.25%
The levy will also apply to all workers above pension age but still working from April 2023. Currently, those employees who reach state retirement age and continue to work do not pay employees NIC.
The levy is due to be a three year 'temporary' measure, but time will tell if it becomes a permanent fixture.
Schools also need to be aware of any changes HMRC make which could affect their payroll outgoings.
Some of the fundamental changes from 6 April include:
Statutory Sick Pay £99.35 per week
Statutory Paternity Pay (SPP), Statutory Shared Parental Pay (ShPP) and Statutory Parental Bereavement Pay (SPBP) will all share the same weekly rate of £156.66 or 90% of average weekly earnings, whoever is lower.
Class 1 NI thresholds are increasing.
Whilst the New Year has just begun, the new tax year is just around the corner. As we have outlined, there are some crucial changes hanging in the balance that will impact school budgets. It is essential to consider these factors now to ensure that you are not caught out.
In particular, the delayed confirmation of pay increases could have a knock-on effect, so considering the changes that we are aware of and being prepared could help mitigate this.